Would it be possible to dynamically update the collection offset for instancing?
The Collection Utilities addon can batch update collection instance offsets from multiple selected objects.
Have in mind that it do not automatically &quot;live update&quot; center coordinates. It wont update collection instance offsets as you move the object, but it does make the process less painful by allowing to set offset for multiple collections at the same time each from multiple selected objects.
To use it install the addon Collection Utilities from Blender Artists thread or from Blender Market.
After activating it select a bunch of objects in the 3D View, go to the Objects menu at the top, Collections &gt; Set Offset.

Selected objects should represent only the &quot;main body&quot; or center of desired collection instance offsets, since their center position relative to scene coordinates will be used to set the instance offset coordinate. Even if there are more objects in said collections those should remain deselected, otherwise they may negatively affect the desired outcome.
There are a myriad of other options to keep collection offset static for certain axis, like say always keep it at Z=0 despite objects being in the air.
Full disclaimer: Shameless self advertising, I created the linked addon.